Despite continued talk about turnaround efforts, Sears Holdings widened its loss in the third quarter after sales fell at both Sears and Kmart.
The company reported a net loss for the quarter ended Nov. 2 of $534 million, or $5.03 a share, from $498 million, or $4.70 a share, a year earlier.
"We are proactively transforming our business to a member-centric integrated retailer leveraging Shop Your Way to benefit from the changing retail landscape," said Edward S. Lampert, chairman and CEO. "We are transitioning from a business that has historically focused on running a store network into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, in home or through digital devices. We are driving this transformation by investing in capabilities to enable members access to the broadest possible assortment of products and services, enhancing our membership benefits associated with SYW, developing digital and social relationships with our members, using data and analytics to make targeted offers and decisions delivered in real time and expanding our reach through Marketplace and delivery options."
Lampert is staying positive and pointing to progress, citing “substantive” continued increases in the company’s SYW member engagement metrics. But the investments the company has made in its member-centric model as well as in traditional promotional programs have adversely affected its margin.
Revenues decreased $585 million to $8.3 billion for the quarter, as compared to revenues of $8.9 billion for the year-ago quarter. The revenue decrease was primarily due to the effect of having fewer Kmart and Sears full-line stores in operation, which accounted for approximately $200 million of the decline, as well as lower domestic comparable store sales, which accounted for approximately $170 million of the decline.
Revenues were also impacted by the separation of Sears Hometown and Outlet Stores, which occurred in last year’s third quarter.
For the quarter, domestic comparable store sales declined 3.1%, representing a decrease of 2.1% at Kmart and 4% at Sears domestic. The decline at Kmart reflects decreases in its transactional categories, such as grocery and household and drugstore, as well as declines in consumer electronics and toys. These decreases were partially offset, however, by increases in the apparel and seasonal and outdoor living categories. The decline at Sears domestic reflects decreases in most categories including the consumer electronics, lawn and garden, tools, home appliances and apparel categories, as well as declines at Sears Auto Centers, partially offset by an increase in the home category.